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IDirect TechnicalOutlook 2023
IDirect TechnicalOutlook 2023
1
Nifty’s Decade: CY30 Target @50000
Technical Outlook: Nifty CMP - 18420
CY30 Target @ 50000 CY23 Target @ 21400
India’s decade, ride with conviction Prognosis for CY23
2023
Strategy –PICK
History does not repeat but it rhymes: Indian equities are likely to display the The Nifty target for CY23 is placed at 21400 while strong support is placed at 16200
same rhythm that the US and Nikkei did in 1990-2000 and 1980-1990, levels. Our prognosis is well supported by:
MOMENTUM
respectively, i.e. delivering a decadal move of 5x on headline indices. Our
prognosis of various Technical studies leads us to the conclusion that the Nifty is a) Seasonality: Over the past four decades, third year returns of each decade
poised to reach towards 50000 by CY30. More so, the performance of 2021 and have been positive with median of 18%. CY22 projection based on this cycle of
2022 further adds strength to our argument given the Nifty is mimicking our 18900 has been achieved, adding credence to the cycle study. Similar target
forecast trajectory. What is more exciting is that we are entering 2023, which, as from a CMP of 18420 projects target of 21720. Additionally, 70% of the times a
Technical
per decadal studies, has turned out to be a strong year pre-election year has generated positive returns
Such long term trends often have to navigate through bouts of volatility. For an b) Conventional chart work: Breakout from 13 month range (18300-15200)
instance, in our CY18 strategy report we projected Nifty @ 19000 by 2022. Nifty projecting 21400
achieved our target despite Covid related volatility c) Long term breadth thrust: Over the past two decades, on eight out of 10
i) Decadal cycle: Since inception in 1979, the Sensex gained average 4x in each occasions, 60% of Nifty 500 constituents, rising above 200 day moving average
decade. From CY20 close of 13981 (Nifty) similar projection leads to ~56,000 (DMA) has triggered average 25% returns in the Nifty in subsequent 12 months
ii) Relative ratio breakout against MSCI world: In each of the three earlier Mid/small caps to outperform large caps
instances, ratio breakout was followed by the index gaining at least 3x post Relative outperformance of midcap universe is in mid-cycle of a multi year bull
breakout (current breakout in May 2022 at 16585, projects 50,000 for the Nifty in phase. We expect this outperformance to get further amplified over the next couple
Nifty CY30 projection based on decadal Cycle *CY22 Performance - Recommendations: 9 Strike rate: 89% Average gain: 22%
50% 60000
In line with projection for CY22, Nifty 40%
58845 Techno-Funda Top Picks Time Frame: 12 Months
40% approached 2nd year target of 18900 50000 Scrip I-Direct Code Market Cap Buying Range Target Upside (in %)
Projected Returns in %
50471
Larsen & Toubro LARTOU 3,07,072 2110-2185 2,520 16
30% 23% 40000
18% 18% 19% 17% Ambuja Cements AMBCE 1,12,169 545-572 660 17
15% 15% 37971
Nifty
• Since inception in 1979, the Sensex returns for each of the four decades has been 4x (median value). The study helps investors to form a larger perspective
and stay the course during times of turbulence. As can be seen in the below chart, despite a host of negativity around geopolitical worries along with higher
MOMENTUM PICK
inflation and interest rates, the Nifty stayed the course by achieving its projected target of 18900 for CY22
• Projection for current decade (CY21-30) on the basis of CY20 close (Nifty:13982) works out to around 55,000
• Empirically, third and fourth year of the decade has always been positive with acceleration in returns to higher teens (median values)
• It is worth noting that such returns do not come in a linear fashion and corrections of around 20% along the way have always been a buying opportunity
50471 7.0
4.5 5
Nifty
20% 35961 30000
Median
18887 30594 30808 4.0 Nifty in CY20 3
10% 17354 25784 20000 7.1 4.5
22378 1% 3.0 @ 13982
18891 5.2 2
0% 16480 -5% 10000 2.0 3.8
Decade / Year 1 2 3 4 5 6 7 8 9 10
1981-1990 54% 4% 7% 7% 94% -1% -16% 51% 17% 35%
1991-2000 82% 37% 28% 17% -21% -1% 19% -16% 64% -21%
2001-2010 -18% 4% 73% 13% 42% 47% 47% -52% 81% 17%
2011-2020 -25% 26% 9% 30% -5% 2% 28% 6% 14% 16%
Positive Instances 50% 100% 100% 100% 50% 50% 75% 50% 100% 75%
2021-2030 2021 2022 Historically, in all decades second, third,
Returns 22% 7%
fourth, ninth year have posted positive
returns of 15%, 18%, 15%, 40%,
Average 23% 17% 29% 17% 28% 12% 19% -3% 44% 12%
respectively (median values)
Median 18% 15% 18% 15% 19% 1% 23% -5% 40% 17%
Dow Jones Index vs MSCI World Index Globally similar ratio breakouts resulted into minimum 3x returns in subsequent 6 years 16
* For details please refer Appendix
MOMENTUM PICK
8
16
3x
4x 8
4x
On three occasions breakout from ratio line garnered minimum 3x 4
returns in four years 2
10
4
4x Historically, post multi year breakout from ratio line average 3x returns
seen over next 6 years
2
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Source: Bloomberg, ICICI Direct Research
December 19, 2022 ICICI Securities Ltd. | Retail Equity Research Click here to go to top 3
History of mega bull trends and projection for CY30
Major Bull markets Since 1980 Target for CY30 Sensex @ 1,65,000 159744
Rat io Breakout Dat e Value Resurns in Nifty @ 50,000
MOMENTUM PICK
No. of t ime
May 2022 79872
From To From To
Feb-81 Feb-86 160 664 4 39936
21206 55566
Jun-90 Apr-92 850 4,546 5 19968
Nov-04 Jan-08 6,234 21,206 3
(Nifty 16585)
9984
May-22 ? 55,566 1,65,000 3
4546 4992
6234
Sensex- Weekly chart 3x 2496
Over the past four decades, there have been three mega bull trends 1248
664 in India, with minimum 3x returns post signal
624
850 Signal is captured on rare breakout on relative ratio of Sensex vs.
5x MSCI World 312
Current signal occurred in May 2022 (Nifty: 16600) thereby 156
160 projecting 50,000 by CY30
4x 78
1.5
0.75
1983
1986
1988
1995
1997
2000
2007
2009
2018
2021
2030
1979
1980
1981
1982
1984
1985
1987
1989
1990
1991
1992
1993
1994
1996
1998
1999
2001
2002
2003
2004
2005
2006
2008
2010
2011
2012
2013
2014
2015
2016
2017
2019
2020
2022
2023
2024
2025
2026
2027
2028
2029
Source: Bloomberg, ICICI Direct Research
December 19, 2022 ICICI Securities Ltd. | Retail Equity Research Click here to go to top 4
MOMENTUM PICK
Zeroing down on CY23
MOMENTUM PICK
• We have highlighted the Decadal cycle earlier in the report
• The projection for the first two years of the decade has panned out in line with the decadal cycle study
100%
• As we enter 2023, the third year have always produced positive returns with a median of 18%, highlighting bulls are in charge in the
third year of the decadal cycle
w
80%
73%
70%
60%
40%
28%
30% Nifty @ 21500
18%
20%
7% 9%
10% Median 18%
0%
1983 1993 2003 2013 2023
MOMENTUM PICK
Projection of 21400 for CY23 based on:
Breakout above 13 month’s consolidation (18300-15200) signals shift to
higher orbit with projected target around 21400 in CY23
Breadth thrust 18604 18350
18096
Support
@16200
16747
8%
15431
18% 15184
14151
MOMENTUM PICK
• Arrows on the Nifty chart point to initial dates when the breadth indicator (percentage of
stocks above 200 DMA) rose above 60%
12800
80% • In eight out of 10 instances over past two decades, 12 month forward returns have been
in double digits with average of 25%
6400
80
60
40
20
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
MOMENTUM PICK
Election cycle is a major phenomena in the equity markets. It is divided into four parts - election year, post- election year, midterm years
and pre-election year. 70%
Indian equity markets have also highlighted certain characteristics depending upon the election cycle that is currently prevalent.
CY23 being a pre-election year will have a significant bearing on sentiments in equity markets. It has been observed that benchmark
indices have performed relatively well in pre-election year. Over the past four decades, 70% of
the time the index posted positive
The index has generated positive return in seven out of the 10 instances. Out of the three negative return instances, two were during returns in pre-election year
1995 and 1998 when there was an unstable political scenario in India while the other one was during the Global Financial crises of 2008
30% 19%
7% 9% 6%
0%
-30% -16%
-21%
-60% -52%
1983 1988 1990 1995 1997 1998 2003 2008 2013 2018
Pre-Election Years
1.4 1.4
BSE 500 vs. BSE 100
MOMENTUM PICK
1.35 1.35
1.3 1.3
2x
1.25 1.25
200 weeks
4x moving average
• The BSE 500 vs BSE 100 ratio, rising implies outperformance of broader market against large caps
1.15 • Historically, bullish crossover above long term 200 week’s moving average leads to acceleration of upward momentum 1.15
• Such crossover lasts for nearly four years leading to a multifold rally
• Currently, we are in the middle of this cycle, reinforcing our multi year bullish stance
1.1 1.1
1.05 1.05
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
EMAVG (200) BSE500 Index / BSE100 Index
MOMENTUM PICK
• Stocks with high relative strength that are expected to • Under owned stocks and sectors, which remained out of Larsen & Toubro
outperform the benchmark
• Strong uptrends on longer degree charts
favour over several years with now prices breaking out of Ambuja Cements
multi year highs with significant volumes
Bosch
Sectors Federal Bank
Sectors
BFSI, Capital goods, Defence, Telecom PSU, Auto & Auto ancillaries, Hospitality Sundaram Finance
Bajaj Electricals
KEC International
MOMENTUM PICK
Auto and Auto Ancillary : Escorts , M&M, Maruti, Gabriel Auto and Auto Ancillary : Apollo Tyres , Bosch, Bharat Forge, Eicher Motors,
BFSI : Axis Bank , SBIN, Indian Bank Mahindra CIE , Rico Auto
Capital Goods : ABB, ACE, Kabra Extrusion, L&T, Siemens, Timken BFSI : Bank of Baroda, Federal Bank , CUB, M&M Finance
Consumption : Britannia Industries, Trent Capital Goods : HBL Power, KEC, Sanghvi Movers, TWL, Techno Electric & Eng
Defence : BEL, BDL, HAL, Mazagon Dock Consumption : ITC
Infra & Logistics : Ambuja Cements, JK Lakshmi Cement, Adani Ports Defence : Cochin Shipyard, Midhani
Metal : JSW Steel, JSL, Ratnamani Metals Metal : VSSL
Pharma & Chemicals : Sun Pharma, Torrent Pharma, Aster DM, Vinati Organics, PSU : RCF, Concor, RVNL, REC, IRCON
Real Estate : Phoenix Mills, Prestige Estates Real Estate : DLF
Technology : KPIT Technologies, Affle, Redington Telecom : Tejas Network
Telecom : Bharti Airtel Hospitality : EIH Ltd, VIP, LemonTree
Commodity and Currency Outlook
Hospitality : Indian Hotel
Others : Adani Enterprises, Shoppers Stop, KKCL
* Stocks highlighted in Orange Colour with Bold are our CY23 recommendations. Stocks are listed in Sector and Alphabetical order
Note: The list of stocks listed above is selected on the basis of certain statistical and technical models. This report recommends only 9 stocks and other stocks mentioned are only
of analysis purpose. Click here to go to top
Source: Bloomberg, ICICI Direct Research
December 19, 2022 ICICI Securities Ltd. | Retail Equity Research 13
Larsen & Toubro (LARTOU): Secular uptrend to get bolstered
MOMENTUM PICK
extended its uptrend after coming
Target @ 2520
out of 13 years of hibernation in
CY21 exhibiting strength. Our A resolute breakout above rising supply line joining highs of the
preferred pick within the large cap last 12 years signals acceleration of the up move 1990
capital goods space is Larsen &
Toubro as it has logged a resolute 1607 Key support
breakout above 12 year’s long @ 1870
rising supply line joining highs 1460
since CY10 (| 1043) highlighting 1043 984 50 Quarter
acceleration of up move
EMA
• Post breakout the uptrend is well
defined by stronger rallies and 661
shallow retracements, key 451
ingredient of structural bull phase Quarterly RSI has recently generated a buy signal and is seen
• With a pick-up in capex cycle and diversified segmental exposure, we believe L&T is best capex play in the large cap capital goods segment. The company
is optimistic about meeting its 15% growth guidance for revenue and order inflow in FY23. L&T has targeted revenues and order inflow growth at a CAGR
of 15% and 14%, respectively, over FY21-26 with a consolidated RoE of 18%
• Focus on asset monetisation to further strengthen the balance sheet and improve return ratios. L&T has strong b/s, controlled working capital and strong
cash generation. In the medium term, with order backlog of | 370000 crore coupled with improving margin profile and literally net debt free standalone
balance sheet, we expect strong earnings CAGR of 16.2% over FY22-24E. The key concern on L&T metro projects is also in the resolution stage, which will
further lighten up the balance sheet and lead to a rerating, going ahead. We value L&T at | 2355 on an SoTP basis
Source: Spider Software, ICICI Direct Research
December 19, 2022 ICICI Securities Ltd. | Retail Equity Research 14
Ambuja Cements (AMBCE): On cusp of consolidation breakout
MOMENTUM PICK
last month after 13 month’s
consolidation and Ambuja has been Target @ 660
key outperformer, with high relative
strength 585
MOMENTUM PICK
its primary up trend. Technically, 27990
we are constructive on Bosch,
which we expect to outperform as it Breakout above long term supply line joining highs 25240
since CY15 signaling turnaround after long period of Target @
has generated a breakout above 22000
long term supply line joining highs under performance
since CY15 (| 27990) signalling
turnaround after a long period of
underperformance Key support
• The stock, during CY22, has @ 14800
consolidated and formed a higher
base above 13500 that is 50% 50 Quarter 7850
retracement of the previous major EMA
up move (| 7850-19250)
Quarterly MACD has generated a buy signal
• We like Bosch given its leadership positioning in powertrain technology with parent supported ready solutions for Flex Fuel, BS VI phase II transition, EVs
and hybrids. The company is poised to benefit from industry tailwinds in the form of healthy volume growth, diesel powertrain gaining traction
domestically and incremental role to play amid more stringent emission control norms (BS-VI phase 2 and beyond)
• Amid strong focus on increasing domestic sales with underlying focus on exports (~9-12% of sales), we build in 18.2% sales CAGR over FY22-24E.
Operating leverage gains and localisation push is seen aiding margin improvement to 14.5% by FY24E with consequent PAT growth pegged at 23.1% over
FY22-24E. With cash positive b/s and capital efficient business model, we have a positive view on the company
Source: Spider Software, ICICI Direct Research
December 19, 2022 ICICI Securities Ltd. | Retail Equity Research 16
Federal Bank (FEDBAN): Changing orbit…
MOMENTUM PICK
spearheading the ongoing bull run,
we expect it to continue its Breakout above five years range signals start of a new bull phase Target @ 168
outperformance as the Bank Nifty
has recently generated a breakout
above its 14 months range. Federal 127 129
Bank is our top pick among midcap
banking stocks
109
• The stock has recently generated a Key support
resolute breakout above its last five @ 108
84
years range (| 127-36) as it resolved
above CY17 highs (| 127) signalling Higher base at 12
a start of a new bull phase months EMA
• Robust credit growth in high teens (15-17% CAGR in FY23-24E) and deposits growth in early teens to aid business momentum. Partnerships with fintechs
to strengthen liabilities base
• Effective transmission of rate hikes, lower incremental slippages and focus on high yielding products (CV/CE, micro, credit cards & personal loans) to aid
margins expected at 3.2-3.3% in FY23-24E
• Sustainable business growth, steady margins and credit cost at <1% to enable healthy RoA of ~1.25% in FY23-24E. Hence, we remain positive on the
stock
Source: Spider Software, ICICI Direct Research
December 19, 2022 ICICI Securities Ltd. | Retail Equity Research 17
Sundaram Finance (SUNFIN): Falling channel breakout
indicates resumption of uptrend…
Technical Outlook Rec. Price 2290.00-2420.00 Target 2890.00 Upside 21%
• The BFSI space has outperformed
Monthly Bar Chart
MOMENTUM PICK
in CY22 while NBFCs are now
catching up amid signs of interest Target @ 2890
Breakout above falling channel signals 2868
rates nearing its peak. Sundaram
resumption of up move
Finance’s share price has given a
falling channel breakout signalling
end of its 15 month corrective 2100
phase and resumption of uptrend Key support
• From a structural point of view, the @ 1950
share price has retraced its 2020-21 1555
rally (982-2868) by 61.8% over 15
months indicating slower
982
retracement that augurs well for
long term price structure
• Improving industry outlook coupled with focus on gaining market share to aid business growth. Further, expanding geographic footprint in non-southern
regions and growing new areas of focus – lending to MSMEs, small NBFCs and leasing business will propel disbursements ahead
• Margins could remain volatile in near term. However, improvement in operating leverage and lower credit cost is seen aiding RoA ahead of 2.5% in FY23-
24E. Sustained business growth in subsidiaries to further aid valuations. Thus, we remain positive on the stock
MOMENTUM PICK
has been consolidating in CY22 1588
after strong rally of CY20-21, thus Buying demand is seen emerging from the key support area thus offers fresh Target @ 1440
forming a higher base. Within the entry opportunity with favorable risk reward set up
space, we like Bajaj Electricals with
favourable risk-reward Change of Polarity previous
resistance acting as support
• The stock is currently placed near Key support
the key support area of | 1000-1100 705 858 @ 930
as it is the confluence of rising 12
months EMA (currently at | 1125)
and 50% retracement CY20-21 rally 345 Shallow retracement
(| 263-1588) and higher base at
• We expect the stock to resume up 263 12 months EMA
move and head higher towards
• Despite pandemic led challenges and supply concerns, BEL’s consumer products (CP) segment has grown at a CAGR of 11.1% over FY19-22 led by new
product launches and dealer expansion into new geographies. Going forward, we believe BEL’s CP revenue to grow at a CAGR of 14% over FY22-24E led
by new product launches (into lightings and appliances segments), expansion of its sales & distribution channel and market share gains in its key product
segments. On the margin front, we build in EBITDA margin expansion of ~330 bps over FY22-24E led by improving sales mix and easing raw material
prices
• In order to streamline its business structure, BEL plans to demerge its low margin engineering & project business by the end of FY23E. We believe strong
growth in the consumer product segment, robust balance sheet condition and restructuring of business profile will benefit the company in the long run
Source: Spider Software, ICICI Direct Research
December 19, 2022 ICICI Securities Ltd. | Retail Equity Research 19
KEC International (KECIN): Triangular consolidation breakout…
MOMENTUM PICK
previous year’s multi year breakout
indicating structural uptrend. In the Target @ 598
power infra space, one of our top 549
recommendations is KEC, which is
resolving out of a triangular
consolidation pattern of past two
years indicating resumption of
uptrend 358 Key support
• Structurally, share price has formed 352 @ 390
a strong base around 350-370 zone, Rising 52
which was earlier breakout level week EMA
and rising 52-week average
• We expect the stock price to extend
• KEC’s SAE business’ legacy EPC projects will get executed by Q3FY23, which will arrest losses and help to improve margin. Also, execution of new orders
with good margins will come into play in H2FY23
• KEC over the past years has significantly de-risked its business from a core T&D player to an all-round infra player with sizeable scalability happening in the
railways and the civil segment. Non T&D business is now almost 50% of the overall revenue pie. With strong backlog of | 27569 crore with L1 orders worth
~| 6500 crore and execution low margins orders behind us, we believe KEC is entering a strong growth trajectory. With PAT CAGR of 53.2% over FY22-
24E and reducing interest cost intensity, we expect rerating to happen for the stock. We value KEC at | 515 i.e. 17x P/E on FY24E EPS
Source: Spider Software, ICICI Direct Research
December 19, 2022 ICICI Securities Ltd. | Retail Equity Research 20
Mishra Dhatu Nigam (MISDHA): Rising from three year
hibernation…
Technical Outlook Rec. Price 215.00-230.00 Target 295.00 Upside 31%
• The share price of Mishra Dhatu
Weekly Bar Chart
MOMENTUM PICK
Nigam has recently generated a
Breakout above 30 months triangular consolidation Target @ 295
resolute breakout above 30 months 278 signals resumption of up move
triangular consolidation with strong
268
volume of more than double of its
10 months average volume of 0.2
crore share per week signalling 214
resumption of up move 219
• The stock has retraced its 28
month’s corrective decline (| 278- Key support
156) in just six months signalling @ 180
faster retracement indicating 156
20 Weeks
structural turnaround 135 EMA
• Last six week’s breather towards
• As on October 1, 2022, Midhani’s order book was at | 1501 crore compared to | 1359 crore as on July 1, 2022. In terms of order book break-up, ~55% is
from the defence segment, ~35% is from the space segment while balance ~10% is from others
• The wide plate mill of Midhani is currently under trial runs. Once the wide plate mill is fully ramped up it is expected to generate revenue to the tune of ~|
500 crore. The | 500 crore annual revenue run rate from the wide plate mill is expected reached in FY24E, once the entire product range is established
• Going forward, as the facilities ramp up production, additional revenue is expected is likely to flow from wide plate mill as well as the Rohtak plant, thereby
providing healthy revenue visibility for the company
Source: Spider Software, ICICI Direct Research
December 19, 2022 ICICI Securities Ltd. | Retail Equity Research 21
Techno Electric (TECEEC): Multiyear breakout in the offing…
MOMENTUM PICK
breakout above 2008 highs after
decade long consolidation. Within Target @ 410
power infra segment, Techno 362
Electric is on the cusp of breakout
from four year’s consolidation
indicating structural turnaround
• The stock has witnessed renewed
buying momentum over past few
months and forming higher high- Key support
low indicating steady uptrend. We 224
@ 260
expect rallies to further accelerate
above 320 which acted as hurdle on
numerous occasions 173
• EPC Business: Contributed ~92% to FY22 revenue, generated excellent RoCE of 50-75% over the past five years. PPP projects business: It is present in
BOOT/BOOM transmission projects in PPP mode. Wind Power: TEEC owns ~130 MW of wind power generation capacity
• Entry into data centre, smart meters and FGD market and becoming significant EPC player that improves revenue visibility over the next few years. The
company has a healthy balance sheet and cash balance of | 1200 crore
• During Q2FY23, the company booked orders worth | 400 crore against | 500 crore in Q2FY22 and | 1900 crore in Q1FY23. Current order book was at
| 3600 crore. For FY23, the management has maintained its order inflow guidance of | 3000 crore across from FGD, T&D, smart metering and data centres
Source: Spider Software, ICICI Direct Research
December 19, 2022 ICICI Securities Ltd. | Retail Equity Research 22
Performance Scorecard
CY22 Performance
Rec. Date Stock Recommended Rec Price (|) Target (|) % Profit/Loss Comment
MOMENTUM PICK
28-Dec-21 Indian Hotel 178 238 34.0% Target Achieved
28-Dec-21 Gabriel India 132 175 33.0% Target Achieved
28-Dec-21 SKF India 3640 4700 30.0% Target Achieved
28-Dec-21 ABB 2190 2750 23.0% Target Achieved
28-Dec-21 ABFRL 275 360 15.0% Booked profit at 315
28-Dec-21 JSL 191 240 15.0% Booked profit at 219
28-Dec-21 TCI 730 950 15.0% Booked profit at 837
28-Dec-21 United spirit 880 1080 7.00% Booked profit at 945
28-Dec-21 HCL TECH 1258 1485 -17.00% Square off at 1044
MOMENTUM PICK
DJIA Oct-90 Jan-00 2,354 11,750 5 111
Apr-78 Apr-81 434 1,810 4 39
Hang Seng Jan-91 Jan-94 3,243 12,599 4 36
Aug-03 Jan-08 10,908 31,958 3 50
Nikkei Jan-82 Dec-89 7,918 38,957 5 95
Dax Oct-93 Mar-00 2,069 8,136 4 78
MOMENTUM PICK
From To Months From To (%) From To Months From To (%)
Sep-03 Sep-03 1 1431 1285 -10 Nov-09 Nov-09 2 5181 4538 -12
Jan-04 May-04 4 2015 1292 -36 Jan-10 May-10 5 5310 4675 -12
Jan-05 Jan-05 1 2120 1894 -11 Feb-12 May-12 4 5629 4770 -15
Mar-05 Apr-05 2 2183 1896 -13 Oct-12 Oct-12 1 5815 4888 -16
Oct-05 Oct-05 1 2669 2307 -14 Feb-13 Apr-13 2 6112 5477 -10
May-06 Jun-06 2 3774 2596 -31 May-13 Aug-13 4 6229 5118 -18
Jul-06 Jul-06 1 3209 2878 -10 Mar-15 Feb-16 12 9119 6825 -25
Dec-06 Dec-06 1 4047 3658 -10 Sep-16 Dec-16 4 8968 7893 -12
Feb-07 Mar-07 1 4245 3554 -16 Jan-18 Mar-18 3 11171 9952 -11
Jul-07 Aug-07 1 4648 4002 -14 Sep-18 Oct-18 1 11760 10005 -15
Oct-07 Oct-07 1 5737 5070 -12 Jun-19 Aug-19 2 12103 10637 -12
• Indian equities remained resilient in CY22 despite FIIs pulling out more than | 135,000 crore as strong DII inflows (| 169000 1400000
MOMENTUM PICK
crore) absorbed the pain 1200000
32000
• DII activity over the past few years has seen a remarkable jump helping, reducing vulnerability to foreign outflows 18%
• This is a major structural change in favour of Indian equities from a liquidity point of view 1000000
25% 800000
40% 600000
29%
64%
8000 400000
200000
2000 Sensex FII Cumulative investment since CY00-till date DII Cumulative investment since CY00-till date -200000
1400000 equities, leading to acceleration of up move in the Indian equity market 110
100
1200000
90
1000000
80
800000
70
600000
60
400000 50
200000 40
0 30
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
FII Cumulative investment since CY00-till date Dollar Index
MOMENTUM PICK
Channel breakdown in Dollar index confirms strength in equities
MOMENTUM PICK
Dollar Index Weekly line Chart
60
Euro / US Dollar
1.6
150
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
MOMENTUM PICK
• Percentage of stocks above 200 DMA of S&P 500 universe has bounced after recording extreme low below 20
• Since 1990 reading below 20 has always led to a durable bottom in each of the nine instances
• Subsequent rallies in the S&P 500 have measured minimum 20% from lows on each occasion
• Over the past three decade, on multiple occasions buying demand emerged from long term 200 week’s DMA
MOMENTUM PICK
• Breakdown below last two year rising channel highlights end of up trend. It is expected to undergo 125
price/time consolidation in the broad range of $ 70-95.
• Upside are capped at $ 95 being the value of 52-week ema Upside capped
105
• Key support placed in $ 65-70 band at $95
86
71
65 Support
@ 65
52 Weeks
EMA
16
Road No 7, MIDC,
Andheri (East)
research@icicidirect.com
MOMENTUM PICK
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